19.03.2010

Politics & the Nation

• What are totalisation agreements?
• In the context of India asking the US to start negotiations on a totalisation agreement, knowing a bit about this would be of help surely.
• A totalisation agreement would allow Indian professionals working for a limited period in the foreign country not face social security taxation.
• Totalisation agreements are needed because workers employed in another country could end up paying social security taxes in both his country and where he works.
• According to estimates, India could save up to $1 billion that professionals on shortterm contracts contribute to social security annually in the US.
• India has signed social security agreements with Belgium, France, Germany, Switzerland, Luxembourg and the Netherlands in the recent past. Similar agreements with other countries like Canada, South Korea, Czech Republic and USA are being pursued.

Finance & Economy

• Why did some foreign telecos not participate in the 3G auction?
• Uninor, a joint venture between Norway's Telenor and India's Unitech, first wants to see clarity emerge on the allotment of 2G spectrum before it takes the 3G plunge.
• Allocations of 2G airwaves have been put on hold until the government comes up with a new allotment methodology. Before March 2009, when the allocations were stopped, telecom companies got spectrum based on their subscriber numbers.
• Also staying away are overseas multinational telecom firms such as AT&T, Verizon, British Telecom, France Telecom, MTN, Orascom and Deutsche Telekom that are not present in India. They argue that the 3G policy is heavily loaded in favour of existing operators that offer services on 2G airwaves.
• Another reason for shunning the 3G auction is that many countries have already started commercial deployments of 4G technologies such as long-term evolution and Telenor is evaluating whether it should leapfrog by skipping 3G.
• Successful bidders for 3G spectrum will get 5 MHz of airwaves. While this is not enough for new players, it will be sufficient for existing ones to migrate to 3G.
• 3G services were originally scheduled to be launched in India in 2007, but have repeatedly been delayed amid troubles over freeing up spectrum and setting bid prices. First launched in Japan in May 2001, the services are available in over 90 countries.
• The auction is scheduled to start on April 9.
• The base price for pan-India 3G airwaves is Rs 3,500 crore. Three slots each will be auctioned in 17 telecom service areas and four in the remaining five. State-owned BSNL and MTNL have already been allotted 3G frequencies.

• Banga & Nayak get set for new innings
• Manvinder ‘Vindi’ Banga, president, global foods, home and personal care and member of the Unilever Executive (UEX), and former chairman of HUL in India, announced that he would quit the world’s second largest consumer goods company by sales at the end of May.
• Mr Banga was a contender for the top job at Unilever, which, of course, eventually went to hard-driving Paul Polman, formerly from Procter & Gamble (P&G), a company with a very different culture. His exit was seen as inevitable once he was passed over by the Unilever board.
• Meanwhile PJ Nayak, who transformed Axis Bank into India’s fourth largest by market capitalisation from an also ran bank in the course of a decade, has been hired as the chief executive of Morgan Stanley India to boost its fortunes amid intensifying competition from JPMorgan and Bank of America-Merrill Lynch.
• Trends in gourmet food
• At New Delhi’s Le Marche chain, you can buy Godiva chocolates that will set you back by Rs 4,300 for 235 gms.
• At Mumbai’s Godrej Nature’s Basket chain, if you bought a kilo of Iberico ham, you will be billed Rs 9,000.
• In Chennai, the capital of a state where political parties routinely come to power promising rice for Re 1 per kg, the Nuts ‘n’ Spices chain retails Darjeeling White Tea for Rs 15,000 a kg.
• These were the things that could never even have been in one's dreams back in 1991. It was the liberalisation that was set in 1991 that has now made these possible.
• Today let's learn a bit about our ports sector
• The country has 12 major ports and about 200 minor ports. The 12 major ports are projected to handle about 1 bn tonnes by 2012 while the minor ports about 0.58 bn tonnes.
• The sectoral regulator, Tariff Authority for Major Ports (TAMP), is mandated to rationalise the tariff structure and streamline the tariff setting system. Also, overall, its brief is to call for competitive pricing of port tariffs, and ‘to push performance of Indian ports to internationally competitive levels’.
• What are the advantes and disadvantages of a cost-plus regulatory regime?
• The cost-plus tariff regime incentivises investment and capacity-addition. But at the same time it could offer a perverse incentive for padding costs to artificially boost returns.
• Therefore, economists look askance at cost plus regimes. Instead they plead for a focus on service quality, ship turnaround time and overall efficiency levels.
• Here is a very good definition of fiscal stimulus
• Fiscal stimulus in the Keynesian framework consists of extreme affirmative government action through the Budget to boost economic activity. Traditionally, this concept would refer to increasing fiscal deficits wherein the government spends, through high borrowings or printing of currency, to provide purchasing power to the people so that demand is sustained. Therefore, the pre-requisite of a fiscal stimulus is a high fiscal deficit. Such deficits are brought about by either higher expenditure or lower tax rates.
• All that you would want to know about Tobin tax
• Here is today's ET in the Classroom column that explains all about it. You might have noticed that it is gaining currency again in the context of the former RBI Governor (YV Reddy) raising the issue at an international forum.

Language Lessons

• hostelry: Noun
• A hotel providing overnight lodging for travellers